Member Article

Devolution: ‘the North East must seize this opportunity with both hands’

Businesses across the country see devolution as an opportunity to spur growth, promote competition and kick-start regional economies, a new survey of members of the Institute of Directors reveals today (Monday 27 July 2015).

In the poll of over 1,000 business leaders, two-thirds (65%) said they supported the Government’s plans to devolve powers to cities and regions.

IoD members supported giving combined authorities significant extra powers on housing, planning, transport, education, skills and local taxes. But businesses were clear that tax-raising powers should not be used by local authorities to raise rates or increase the complexity of tax rules. More than half (56%) of IoD members said they were concerned that devolution could lead to higher taxes, or additional tax compliance costs.

The IoD is calling on local politicians to put enterprise at the heart of the devolution settlement.

In a survey of 1,085 IoD members, conducted between June 24th and July 9th:

• Two-thirds (65%) said they supported the plans for devolution
• Six in ten (58%) said they supported the model of directly elected mayors for combined authorities
• Businesses showed support for devolving powers over housing and planning (78% support), transport (76%) and education and skills (52%).
• However, there was staunch opposition to the idea of giving combined authorities the power to keep or alter the rates of national business or personal taxes such as national insurance, income tax, corporation tax and VAT.

The Chancellor has given local authorities until 4th September 2015 to submit a case for devolving powers to their cities and regions as part of his spending review.

Graham Robb, North East Chairman of the IoD, said: “The IoD has been pushing the devolution agenda in the North East for some time because the Northern Powerhouse doesn’t stop at Manchester.

“Local politicians and businesses must work together to put forward a credible plan to convince the Chancellor that we should get additional powers over transport, skills and planning as soon as possible. Time is running out to meet the deadline for the Spending Review this autumn, the North East must seize this opportunity with both hands.”